Bankruptcy?? who's in?

davec · #1 11-10-2008, 11:29 AM

In light of the Circuit City filing an 11 today. I can't help but wonder how the ecconomy and the tighting of banks lending money, how this will effect the music manufacturing industry?

I know post Sept 11, the retail side actually saw a slight increase as folks needed an escape and maybe the idea of putting off buying that ______, was no longer justified. Are we getting ready to see some of the small to medium size mfg's shudder down or have there name gobbled up, or as things get tough is music the obvious escape? If it is, will that keep the doors open?

fenderhutz · #2 11-10-2008, 11:32 AM

There is no reason we need a Wal-Mart, Best Buy, Target, or Circuit City every 5-10 miles in well populated areas.

Setting themselves up for failure, did they EXPECT a great economy forever?

This is going to be a something that is going to be occurring quite a bit. It's the small business owners you are not going to be hearing about in the news that are getting hit the hardest.

sb69coupe · #3 11-10-2008, 11:42 AM

In my opinion, the first small businesses to fold will be the ones serving the market segments defined by the "excess" that has been all the rage in the past decade. I've already seen signs of this happening locally where the overall economy hasn't been too badly affected (yet).

Businesses like "Three Dog Bakery" that sells baked goods and treats for dogs. "Dogtopia" day spa and daycare for dogs. "Dinner A'Faire" where you go pay to make pre-measured meals to take home and freeze. Others such as the Yankee Candle Co stores at the malls, Coldstone Creamery with $5 scoops of ice cream, and other specialty retailers that target a single niche. They are all going to be wiped out once things run their course.

It's a shame that people dumped $250k+ into opening these franchises, but I cannot see a viable business model for any of these businesses when times are tough.

davec · #4 11-10-2008, 12:00 PM

Are we going to lose innovative bass makers? Circuit City is/was #2. It will take them a little while to die, but they are already mortally wounded. What would it mean to Namm if the #2 Big box music retailer closed its doors?

midnightsin · #5 11-10-2008, 12:02 PM

Quote:

Originally Posted by sb69coupe

In my opinion, the first small businesses to fold will be the ones serving the market segments defined by the "excess" that has been all the rage in the past decade. I've already seen signs of this happening locally where the overall economy hasn't been too badly affected (yet).

Businesses like "Three Dog Bakery" that sells baked goods and treats for dogs. "Dogtopia" day spa and daycare for dogs. "Dinner A'Faire" where you go pay to make pre-measured meals to take home and freeze. Others such as the Yankee Candle Co stores at the malls, Coldstone Creamery with $5 scoops of ice cream, and other specialty retailers that target a single niche. They are all going to be wiped out once things run their course.

It's a shame that people dumped $250k+ into opening these franchises, but I cannot see a viable business model for any of these businesses when times are tough.

I heard that. I work for a small decorative glass studio in the midwest and the past few months have been really hard. Granted we are catering to the upscale homes in the area but there's only so much we can do. If the money isn't there then it just isn't there.

That's a reason why I'm preparing to jump ship.

Bassic83 · #6 11-10-2008, 12:03 PM

One of the most messed-up things about the Circuit City bk is that they JUST opened a store in League City a couple months ago- a lot of people didn't even know it was open. They went from "Grand Opening Sale" to "Store Closing: Everything Must Go!" overnight. Literally. I went in and asked one of the sales schlubs how long they'd been open, and why they were closing. He said "Open 2 months, I just got transferred here, and now I'll be laid off in less than a month. This economy sucks!"

Pretty sad. But just imagine when GM makes its announcement later this month that it is BK, and Ford next month, all those jobs just vaporizing. Recession, my arse. That's a full blown depression!

The musical instrument retailers are feeling pretty pinched right now, as people finally cut back on excessive spending. The silver lining to this recession is that I'm seeing quality music gear starting to show up in pawn shops again. Just picked up a pair of Epifani T210s for a nice price yesterday. Prior to that, I've been seeing only low-end gear, and even that was in short supply. But the consumers have been feeling the squeeze for several months now, so those of you looking to score deals, keep your eyes peeled. I don't envy those who lose their gear to a pawn shop, I've lost stuff before, and it hurts. But had I not pawned it, I would not have gotten through some tuff times.

Some things I've seen in the past year-

An Ampeg V4B, decent shape, $400.

An SWR SM-900, in a rack with a power conditioner and a tuner (Behringer), $350

A white BBN5, Nathan East model for $275.

The only one of those I considered was the NE, but the gold hw was too pitted and corroded. I know, I should have got it and replaced the hw, but I didn't have the funds to dedicate to it, and I knew it would be a slow seller should I decide to flip it.

Long story short, someone's pain could be your gain, it's the way capitalism works. Be on the lookout, and you might get a great deal on something. Time to include pawn shops in your gear searches again!

TheXym · #7 11-10-2008, 01:03 PM

Sorry for those who are losing their jobs, but I'm celebrating Circuit City's demise. I was one of the 3400 they laid of a year and a half ago due to making too much (sorry I was a carryover from the commission days who actually knew my product and how to sell what the customer actually needed while getting multiple accessory and other attachments without lying to them). I also consistently had the lowest return percentage.

Ironic story - the month before I was laid off, I only worked 28 hours (I was a part timer, about 20 hrs/week moonlighting from my teaching gig - not playing out at the time, obviously

) due to honors choral festivals for my students and my father's illness. During that month I sold more warranty dollars in the camera department by myself than the rest of the tech associates combined.

I think in the case of Circuit, it was gross incompetence at the District Manager level and above that did them in. As a general trend, I think they oversaturated several markets, and it's coming back to bite them hard.

Bassic83 · #8 11-10-2008, 02:11 PM

Yes, it is a case of corporate greed. They were great when they first started up, then a few years ago, I noticed that they started a 20% restocking fee on returns, even if they were defective. I had bought a VCR from there and within two days it had laid waste to half my VHS collection. I brought it back to exchange it when I found that out. Pissed me off, so I never went back in.

Part of the economic problem seems to be at the "Ivory Tower" level, and not just with CC...with most companies. CEO pay has gotten way out of hand, in general, and I don't see much improvement to be had. Until executive over-compensation is addressed, I see many more companies either filing for bravo-kilo or going tango-uniform. It's just not a sustainable model, and it is indeed a factor in many larger companies folding.

Please don't misunderstand, I have nothing against people making good money, but when is enough enough? When you have CEOs and other upper-level officials making 4-500 times their lowest paid workers salaries (and considerably more in many cases), there is a problem, IMHO.

Coelho · #9 11-10-2008, 08:36 PM

It is just like the old "pyramid" scheme times... The ones at the top are leaving with the $$ and the ones at the bottom are left paying the bills.

koobie · #10 11-11-2008, 11:24 PM

It seems that Wal-Mart is still experiencing sales gains, however modest they may be. A few mega-discounters may ride this downturn out and come out smiling.

It now seems pretty obvious that some mega-chains in consumer electronics and the m.i. biz (not naming names) have over-expanded and will go through some uncomfortable belt-tightening days. But heck, it's not just electronics retailers, Starbucks just reported a 97% decrease in profits from a year ago. That factors in the costs of store closings (don't know how many, earlier reports said 600 locations), but it's another very visible sign of the heavy weather we're in now.